BILL ANALYSIS Ó AB 2741 Page 1 Date of Hearing: April 22, 2014 ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER PROTECTION Susan A. Bonilla, Chair AB 2741 (Bonilla and Lieu) - As Amended: April 10, 2014 SUBJECT : Professional Fiduciaries Bureau. SUMMARY : Extends the sunset date on the Professional Fiduciaries Bureau (PFB) from January 1, 2015 to January 1, 2019. EXISTING LAW : 1)Establishes PFB under the jurisdiction of the Department of Consumer Affairs (DCA), and vests the duty of enforcing and administering the Professional Fiduciary Law in the PFB chief. (Business and Professions Code (BPC) Section 6510) 2)Establishes a Professional Fiduciaries Advisory Committee to examine the functions and policies of PFB and make recommendations with respect to policies, practices, and regulations as may be deemed important and necessary by the PFB chief. (BPC 6511) 3)Sunsets PFB on January 1, 2015, and transfers the responsibilities and jurisdiction of PFB to the Professional Fiduciaries Advisory Committee. (BPC 6510) FISCAL EFFECT : None. This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS : 1)Purpose of this bill . This bill simply extends the sunset date for PFB by four years to January 1, 2019, and makes a small technical correction. This bill is author-sponsored. 2)Author's statement . According to the author's office, "This bill is necessary because if the Bureau is allowed to sunset, the responsibilities and jurisdiction of the Bureau will be transferred to the Professional Fiduciaries Advisory Committee. PFB has a new chief who works in tandem with a dedicated advisory committee; I look forward to their AB 2741 Page 2 continued management of the profession." 3)Regulation of Professional Fiduciaries . The Professional Fiduciaries Act (Act) was created in 2006 (SB 1550 Figueroa) (Chapter 491, Statutes of 2006). PFB was established to license and regulate non-family member Professional Fiduciaries (PFs), including conservators, guardians, trustees, and agents under durable power of attorney. The Bureau currently licenses 638 PFs. PFs provide critical services to seniors, disabled persons, and minors. They manage matters for clients including daily care, housing and medical needs, and also offer financial management services ranging from basic bill paying to estate and investment management. In order to qualify for licensure, an applicant must be at least 21 years old, be a US citizen or be legally admitted to the United States, submit fingerprints and pass a background check, pass an examination that includes national and state components, and have either a baccalaureate degree, an associate degree and three years' relevant work experience, or at least five years' relevant work experience prior to 2012. Requirements for licensure also include completing 30 hours of approved pre-licensure education courses and earning 15 hours of continuing education (CE) credit each year for renewal. Licensees must comply with reporting requirements and abide by the Professional Fiduciaries Code of Ethics. The Bureau began operation on July 1, 2007, and is charged with the following responsibilities: a) Educating consumers about their rights; b) Promoting legal and ethical standards of professional conduct; c) Investigating the background of applicants; d) Administering licensing examinations; e) Licensing PFs; f) Investigating complaints from consumers; and, AB 2741 Page 3 g) Taking disciplinary action and issuing citations. The Bureau Chief is appointed by the Governor, subject to Senate confirmation, and serves under the direction and supervision of the Director of the Department of Consumer Affairs (DCA) and at the pleasure of the Governor. 4)2014 Sunset Review Report . On March 17, 2014, the Senate Business, Professions, and Economic Development Committee and the Assembly Business, Professions and Consumer Protection Committee held a joint sunset review hearing to hear testimony from PFB as to its performance and the necessity for continuing its existence by extending its sunset date. The Sunset review report drafted by this Committee recommended that PFB continue operations until the next review in 2019, and in the meantime: a) Consider reducing fees sufficient to avoid accumulating a 24 month reserve if PFB cannot get budget authority to hire additional staff; b) Brief the Legislature on the potential pool of new PFs and provide reasonable yearly targets for attracting new licensees; and, c) Discuss with the Legislature and DCA whether to maintain PFB independently if its current staffing and licensing levels do not change. 1)Related legislation . AB 2024 (Bonilla) of 2014 revises the Professional Fiduciaries Act to permit PFB to establish a "retired" and "inactive" status for licensees, provided that licenses may not be renewed, restored or reinstated after three years expiration, and clarifies the ability of PFB to investigate the actions of any PF, even if that person has a retired, inactive, canceled, or suspended license. That bill will be heard in the Assembly Business, Professions and Consumer Protection Committee on April 22, 2014. AB 1859 (Maienschein) of 2014 permits PFs to form Licensed Professional Fiduciary Corporations. That bill will be heard in the Assembly Business, Professions and Consumer Protection Committee on April 22, 2014. AB 2741 Page 4 REGISTERED SUPPORT / OPPOSITION : Support None on file. Opposition None on file. Analysis Prepared by : Sarah Huchel / B.,P. & C.P. / (916) 319-3301